If you’re moving to Australia soon, sorting your finances out is one of the most important steps in the process. Getting used to a new currency is never easy but transferring your financial commitments can be.
We spoke to James at Halo Financial for his advice on how best to arrange your move.
Here is what he had to say:
“The Australian Dollar is very strong at the minute, which is great for when you’re already there but it also means you have to be careful to make sure you get the most for your money when you’re transferring between the two. With the right strategy and forethought and the assistance of some foreign exchange expertise, it’s possible to make the most of the exchange rate volatility and save yourself some money as you transfer your funds into Aussie Dollars.”
On the current condition of the Australian Dollar in comparison to both the Pound and the Euro, James was critical of the European currencies:
“Shall we deal with the bad news first? The Sterling – Australian Dollar exchange rate is within 7 cents of the lowest level it has ever been and the Euro – Aussie rate is actually at its lowest ever level as we speak.”
Making the most
It wasn’t all bad though with James saying anyone can make the most of their money with a little patience:
“The good news is that the Australian Dollar is one of the most volatile currencies in the foreign exchange market, in an average month, we will see something like 6 cents of movement in the Euro – AUD exchange rate and around 9 cents of movement in the Sterling – AUD exchange rate. So with good planning anyone with a month of time on their hands before they have to move their funds can be 5% better off through little more than good timing.”
In terms of how to make the most, James says professional advice can make the world of difference:
“You can enhance that advantage by using automated market orders to capture the best exchange rate throughout the 24 hour day. The foreign exchange markets trade around the clock and, as I am sure you can appreciate, some of the most volatile times for the Australian Dollar happen when the northern hemisphere is closed for business.
“So if you rely on a high street bank with the 9.30 to 4.30 trading hours to buy your currency, you will miss out on 17 hours of volatility. Instead, you can place an automated order into the foreign exchange market to target a specific exchange rate. If that rate is available then on the Martini basis of ‘anytime, anyplace, anywhere’, your order will be triggered and you will have bought your Australian Dollars at your preferred level. “
The strong Australian Dollar has been fuelled by the resources market, which in turn has been fuelled by Chinese demand but James says this has started to slow which means good news for everyone heading Down Under:
“The other good news is that having strengthened so far and so fast, the Australian Dollar is set for a correction. We saw some of that after Australia’s June employment report showed a decline of 27,000 jobs and the Aussie Dollar weakened immediately. We are also seeing the Chinese economy slow and that impacts demand for Australian exports and, consequently, weakens the Aussie Dollar. There is a sad irony in the fact that negative data and news in your chosen destination is precisely what you need in order to make the migration more affordable but that is the situation.”
In terms of the British and Irish economies, James was equally hopeful that new migrants will be able to maximise their money:
“Of course the flip side of that is also true: if we get good news on the European debt debacle or UK economic growth, that news will push the Sterling – Aussie Dollar and Euro – Aussie Dollar exchange rates in the right direction for people heading to Australia. So you really need the country you are departing from to be doing well and the country you are migrating to to be struggling in order for you to gain an exchange rate advantage.“
While financial matters can be a little daunting for a lot of people, James summed it up for us nicely to put the whole situation into perspective:
“As bizarre as that may seem, there is no doubt that a well planned and executed exchange rate strategy will ensure you arrive in Australia with more money than you expected and allow you to start your new life Down Under with a spring in your step. “
- Dominic Ladden-Powell is the Online Editor for the Australian Visa Bureau.
©Visa Bureau 2003-2013